#ETIA14: Big Stick TV

STANFORD, CALIF.—What becomes of big-stick TV? It’s an increasingly relevant question as the second auction of a significant chunk of the television spectrum approaches. Jerry Whitaker of the ATSC, Mark Aitken of Sinclair, Michael Bergman of the CEA and Jeff Weber of 2door partners took it on at the second annual Entertainment Technology in the Internet Age conference at Stanford University.

He said CTIA-The Wireless Association recently released numbers indicating that wireless providers moved 3.2 trillion MB of data in 2012. He said that was 5,200 times more than all the TV stations transmitting full time during the same period.

Whitaker said broadcast TV would have to up its game with the next-gen broadcast standard, ATSC 3.0.

“[It] will have to be so good that people want it,” he said. “They walk into a Best Buy and ask for that… The consumer’s going to drive this, nobody else.”

Weber said broadcast had to find a way to be efficient because the wireless unicast architecture wouldn’t be able to handle all of the traffic.

Aitken said broadcasting provides a mean to simultaneously to such a large audience, and that dynamic ad insertion into the right audience is a way to add a large multiple.

“One of the things that has to be aligned with that is the social side,” he said.

Aitken said broadcasters exist based on the tea leaves of Nielsen. A decision that would foist Aereo forward might be a very good-bad thing, he said, because it would force the issue of extended measurement. That said, he clarified that he was not pulling for Aereo, the New York startup that’s retransmitting broadcast signals without permission. Broadcaster lawsuits against Aereo have reached U.S. Supreme Court , which is expected to decide any day on a lower court denial of injunction.

Weber said Aereo would be very disruptive.

“You start disrupting live and local, and you’ve messed up that whole model,” he said.

Whitaker said ATSC 3.0 done right could end Aereo.

“One would imagine the best solution to Aereo would be good reception everywhere,” he said.

TV Technology asked anyone knew whether or not the system works. Two people in the room said they had it. Jim O’Neill of Ooyala said it “worked OK.” Weber said it didn’t matter if it worked or not, but crux is the legality of Aereo and its implications for retransmission consent law.

Aitken said local broadcasters are making a tenth of what “channels no one watches” are making from retrains.

“Free content will disappear into a non-network neutrality environment where all you have access to is crappy content,” he said.

Weber said the retransmission business model “is moving and it’s out of whack. It started out as free ad-supported broadcast spectrum that’s moving toward a world that’s more market-based. If you want to participate like a cable net, it should probably play by those rules.”

An audience member mentioned seeing a bus in Los Angeles with an ad for an Asian channel saying, don’t spend money on cable. Just buy an antenna.

Aitken said there are markets where 50 percent of the market is getting TV over the air, compared to the 6 percent often cited by the CEA.

“In Baltimore, the CW and the MyNets and the Foxes we control that market, we know that better than 20 percent of our audience is over-the-air,” he said.

The CEA’s Bergman said that was “about the third time I’ve heard that the CEA numbers are less than real.”

“The 20 percent-plus number he’s talking about is the mixed households and the exclusive. Our 6 percent is the exclusive households,” he said.

In the 6 percent, he said a majority have incomes less than $25,000 a year, and that the unemployment rate is 33 percent.

“The 6 percent is not who you’re looking for as an advertiser,” Bergman said. “The mixed number—those watching OTA and OTT—are like my son. They’ll probably never pay for cable.”

Bob Seidel of CBS said another way to look at the numbers was to include pay providers. He said 75 percent of cable and satellite providers get their signal over-the-air. If small broadcasters and cable systems had to do a direct interconnect, the cost would be significant, he said.

“So the OTA viewership is more like 70 to 80 percent when you start going to the blended numbers,” he said.

The big three U.S. automakers failed to panhandle Congress this week, and TV industry ad executives are bracing for the potential fall out. “The thought of losing that base is almost inconceivable,” said one veteran of TV ad sales. “Then

Experts from Fox, Disney and the vendor community will come together at NAB to discuss a dynamic that promises to change the television industry more than any other—the transition to IP-based technology.

Just when will the Internet be the primary delivery mechanism for TV? Depends on who you ask. Some streaming guys at the second annual Entertainment Technology in the Internet Age conference at Stanford University said it may not be far away.